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It's Time To Kill the $100 Bill, Says Larry Summers
HughPickens.com writes: The NYT has an interesting editorial on why getting rid of big bills will make it harder for criminals to do business and make it easier for law enforcement to detect illicit activity. That's why officials in Europe and elsewhere are proposing to end the printing of high-denomination bills. According to a recent paper from Harvard's John F. Kennedy School of Government, a stack of 500-euro notes worth $1 million weighs just five pounds and can be carried in a small bag, whereas a pile of $20 bills worth $1 million would weigh 110 pounds and would be much more difficult to move around. Lawrence Summers, the former Treasury secretary and former adviser to President Obama, has argued that the United States should get rid of the $100 bill. "The fact that in certain circles the 500 euro note is known as the "Bin Laden" confirms the arguments against it," says Sanders. "Technology is obviating whatever need there may ever have been for high denomination notes in legal commerce."
Critics who oppose such changes say the big bills make it easier for people to keep their savings in cash, especially in countries with negative interest rates. Some people also prefer not to conduct transactions electronically because they fear security breaches. According to Sanders the idea of removing existing notes is a step too far but a moratorium on printing new high denomination notes would make the world a better place. "The United States stopped distributing $500, $1,000, $5,000 and $10,000 bills in 1969," concludes the NYT editorial. "There are now so many ways to pay for things, and eliminating big bills should create few problems."
Critics who oppose such changes say the big bills make it easier for people to keep their savings in cash, especially in countries with negative interest rates. Some people also prefer not to conduct transactions electronically because they fear security breaches. According to Sanders the idea of removing existing notes is a step too far but a moratorium on printing new high denomination notes would make the world a better place. "The United States stopped distributing $500, $1,000, $5,000 and $10,000 bills in 1969," concludes the NYT editorial. "There are now so many ways to pay for things, and eliminating big bills should create few problems."
The summary here cites someone named "Sanders" but there is no sanders in the WashPo article. There is someone in there named Sands (note no "er" in the name) but nobody named Sanders.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Looks like I'm going to need a much sturdier box spring!
Is Sanders Summers?
Er, what has this got to do with BTC?
Because of inflation I think it makes sense to reintroduce the $500 bill. Why should you be forced to pay a bank for every transaction?
Why is the rationale for getting rid of the $100 bill explained by making an example with a different currency worth significantly more? Weak...
Exactly what I said the other day. The government hates cold hard cash. They want to track everything we do all in the name of stopping crime. $20 is what is most commonly used in small time drug deals, so are the $50 and $20 next?
The critics are increasing on this one, there's a lot of paranoia about ending physical currency, negative interest rates, bank bail ins, etc.
I generally tend to be partially susceptible to a good / interesting conspiracy theories, within reason. With this one, I'm starting to see it crop up though from a fairly significant amount of financial market doomsayers, although some of them seem to have reasonable credentials.
http://davidstockmanscontracorner.com/ for example
https://en.wikipedia.org/wiki/David_Stockman
I don't know what to think personally. I certainly feel, based on a few years of reading some of this looney news, watching some of the youtube videos on how 'money is created' essentially, the printing since 08 of money and generally how finance is handled internationally that the whole world has no fucking clue of what's going on.
APPARENTLY the G20 meetings recently approved significantly more bank bail ins in many more countries, mine included.
These are quite serious concerns, example a recent pensioner suicide, due to the banks / govt, effectively STEALING this poor bastards money, it's outright theft.
http://www.bbc.com/news/world-europe-35062239
Honestly at this rate some of the "new world order, new currency for ALL!" stuff is ... almost, ALMOST sounding fucking feasible. I'm willing to swallow a bit of the old conspiracy theory bullshit but as more and more evidence piles up, I'm begging to feel like it's time to buy a shitload of gold, silver and ammunition.
Well regardless of your thoughts on this post, how it's moderated, it's not going to change much - there's little, exceedingly little we can do if there's merit to any of this. So scaremongering aside that's the real concern, we simply don't have power as people in general.
NOTE / Disclaimer: Australian here, who DIDN'T buy into the ridiculous bubble housing market here, out of work now and living off cash saved, if that shit gets 'confiscated' there will be trouble.
I sure as heck do not need my savings, that I worked hard for, I scrimped for, I didn't go into debt for like most else, being confiscated / overly taxed or NIRP'd into oblivion. Disgusting concept.
https://www.google.com.au/search?q=NIRP&hl=en&meta=&gws_rd=ssl (NIRP)
There's a difference between 500 Euros and 100 Dollars. About 5x difference. Imagine getting rid of everything above 20 Euros. Wouldn't fly at all.
Also, more than once I've been to restaurants where the smartcard readers weren't working. It still happens. So you'd need to carry a stack of 20 Euro bills just in case.
And what about all those cash countries using USD for transactions, where the local currency is too much in flux to serve as anything other than toilet paper? They'd instantly switch to a currency that has all those necessary bills.
Small denomination rolls are more impressive ... when stuffed in trouser pockets. Just look at the size of my wad.
If anything is going to Kill the economy it's taking away money. I prefer to have large bills when I go to make a purchase. No lady of the evening is going to accept a roll of ones...I mean seriously how am I going to pay for my illicit activities? I not doing a line of coke with a dollar here, I need 100's or nothing!
Unless we can prevent the US dollar's purchasing power from constantly eroding.
The "Stupid Train" of Government Just Keeps Rolling... and plenty of people want even MOAR! 60 years of abject failure in education, failed policies and poverty. Vote for us again and again and again and again... and people do it. I guess in the end, people get the "government" they deserve.
This would be a terrible idea. Bank fraud and laundering is still a pretty popular way to shuffle money around, even though it's riskier now than it used to be, and cash has no impact on that if it's all done electronically. Likewise, from what I've heard, many criminal enterprises will disguise money in physical property such as houses, or even run a legit business and shuffle the money into it. Even if this is (initially) aimed at larger bills, preserving the ability to use cash is an important part of our civil freedom because cash is still pretty much the only way to purchase something without being tracked. You also don't have to worry about people stealing your card and draining all of your life savings out of it, it can't fail because of a faulty magnetic reader, and it's much more convenient for smaller purchases. Larger bills are an easy way to spend money when you're on vacation, it serves a legitimate purpose, and I have trouble envisioning the mafia (or the yakuza) being unable to very easily adapt to this problem while we're all left out to dry.
"Set a man a fire, he'll be warm for the rest of the night. Set a man afire, he'll be warm for the rest of his life."
In the coming Zombie Apocalypse, you can use those "$500, $1,000, $5,000 and $10,000 bills" to wipe your ass. I would not recommend using poison ivy or poison oak.
The only things that will have value, will be canned goods, weapons and ammo. Maybe a bit of clean drinking water on the side.
Hmmm Dinky Dee dog food for breakfast . . . yummy!
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
It's not like Americans have even seen a $100 bill anyway. That's what ? .... two whole days pay for most of them.
... When Money is nothing but paper, Its alot less of a headache, Isn't it, to just simply shuffle it around Digitally? Its easier to type (INSERT_NUMBER_SEQUENCE) than it is to produce legal currency with serial numbers, etc. Alot easier to create problems, too, than worrying about Terrorism adjuncts. There is way too much security issues rite now to be dumping all of our eggs into the Open Internet basket at present time.
-15 Years experience as IT Business Analyst.
They got together at Davos and agrees that eliminating cash was necessary to roll out negative interest rates. A zerohedge article said Europe could go as low as negative 4.5%. Why would you keep your money in a bank that steals 1/20th per year. It's criminal. Don't buy into this BS about preventing crime. They are trying to delay the day of reckoning where their bad banking practices and fraudulent derivatives blow sky high. #2008^2
As far as I'm concerned the true motive is to force larger transactions to use electronic transfers, allowing the government to track more transactions.
This is purely a push for more tracking. The government wants ALL your transactions to be electronic so that you cannot ever have a private monetary transaction.
Love sees no species.
Since you have campaigns for getting rid of the smallest currencies - the penny, the $1 bill - and now a campaign for getting rid of the largest, we should meet somewhere in the middle.
My suggestion would be to have ONLY a single cash token, worth $37.61.
In the first place, the odd amount would improve American numeracy; in the second, anything purchased below that, the change could be absorbed by the US government to offset the debt.
It could be made of plastic harvested from the ocean, so we get the industrious folks who see the effort at bitcoin mining growing too ridiculous to turn their efforts toward a public good: cash mining from the seas, and the substance itself is intrinsically valueless, which is metaphorically representative of the US gov't generally.
It's a win-win-win.
-Styopa
The $100 bill is already dead. You can hardly buy 6 real dollars (1oz silver coins) with it.
See that "Preview" button?
The $100 is ideal for gifts to grandkids (I have 7). Impressively rare to them, crisp, clean. Two $50s just wouldn't be the same!
Get off my lawn, Summers!
I would agree with this if payments can be done faster and no cost for the customer.
As handling cash money costs money as well, there should be no handling fees when I transfer money to anybody else. Even between different banks.
And it should be instantaniously.
I live in Belgium and I do not get charged when I transfer money.Transfering to a bank within the same money unit depends to what bank, but mostly this is free. rest the part where it needs to be faster.
To business account it takes 3 working days. That is stupid and silly and only because the US wants to follow who gets what. Between private persons it is the same day. At the same bank it is instandly.
That last one should be a default. E.g. I sell my car. It is a bag of rust, but I was able to still get 1150EUR for it. Sold it for export and so I had to take money from a stranger. All 50EUR bills, hoping none of them were fake.
Here is what I would have liked:
1) Price is agreed. He does a trandfer, I see it arriving with me. Sale is closed and done. They could even do a 'transfering x%' bar, for all I care. I have done this with a friend who was at the same bank: Phonecall:"What is your bank account?" BEXX XXXX XXXX XXXX. "Transfering now" OK, I received it.
So easy that is how we do it when splitting bills. One person pays with credit card and the others just transfer the money to that one person. As we are friends, the fact that it takes a few days is not an issue, but I would really like it to be faster and obviously it needs to be free.
As long as that is not the case, no go.
"But the governement can follow you". They already can without that and you should stop using /. or anything electronic for that matter.
Don't fight for your country, if your country does not fight for you.
This story broke elsewhere a few days ago and is promoted by bankers such as Peter Sands (the former head of Standard Chartered Bank). Handling physical currency is expensive, and they just don't make much money off it. By forcing people to move to electronic transactions, they get to make a significant cut in account and transaction fees. On top of that some banks will also sell transaction information to third party marketing agencies for further profit. They are very quick to draw links to crime, but seem dismissive of the fact that many people still prefer to use physical currency because they do not trust banks and electronic transactions. Suggestions that we scrap larger bills because of crime ignores countless legitimate uses. It is like saying that we should ban cars because bank robbers have used them as getaway vehicles.
Thanks to inflation, $100 today will buy as much as $15 would in 1969 when they eliminated the other high denomination bills. A $100 bill as of 1969 would be equal to a $650 bill today.
To suggest removing the $100 bill at this point is purely a facist nanny state move, it's not about crime or terror. It's about tracking everything that everybody does.
What exactly is a negative interest rate?
Are there banks that *seriously* expect the customer to pay them money to keep their money for them....?
There are LOTS of banks that demand customers pay them money to keep their money for them. They're called "fees" and they mostly apply to people who are too poor.
A negative interest rate is an interest rate below zero. Most frequently this comes up in lending policy, when a country's central bank decides to stimulate the economy by letting banks borrow and receive some amount of interest for borrowing. That means there's no real advantage to an institution in holding cash, so yes, they may pass on a negative interest rate to a consumer. So there is an incentive to hold the money in cash (or better yet, in equities).
This stimulates the market because *borrowing* costs go down, so the cost of capital goes down; it's easier to borrow money to finance your business or your home improvement project.
why in a country with negative interest rates the central bank would worry if people can't stuff their mattresses with large bills? It seems to me that if you're trying to avoid potential deflation you don't want people squirreling away their money in the banks or their mattresses.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
So the only people who will carry those bills are either the super wealthy, or people who are in the cash business. If people want to keep hard currency then they can have their cash, but I would say that gold is probably preferred. Also, who would pay for a meal with a $10000 bill...nobody would have change.
Where I live, many times I try to spend a BRL $100 bill, the cashier person seems in trouble because of the awkwardness of providing change for so large a bill. It's the highest denomination, yet it is worth less than US $25. EUR $100 seems a bit too awkward, and I wonder why the EUR $500 exist anyway.
Linux is for people who don't mind RTFM.
Removing notes because the bad guys might use them, really ? What an awful world that we live in. That guy is a moron.
It is about tighter control of the rest of population, not the criminals.
All those who keep contemplating that it is so easy to carry 500 Euro notes, are also of the opinion that the value embodied in the paper bill represents time and efforts, savings, work and sweat, of the people who worked to get 500 Euros. Yet assholes such as Larry Summers consider all that money to be owned "by society" which is only temporarily in the hands of the "criminally minded" individual.
Two hundred years ago farmers would have chased you out of the village with the pitchforks if you would try to pay with the pieces of paper. For several hundred years there was a statement on every paper note stating that every paper note is exchangeable to gold, no questions asked.
Then there was WW1. Latin Monetary Union, established by Napoleon, has evaporated. Most of the promises pffft... and evaporated, except perhaps for Switzerland. Then, eventually, governments realized that many people are conditioned to accept paper money and it does not need to be backed with gold, and fiat currencies became widely used.
When electronic money has been invented, it has been realized that the money no longer needs to be printed. However few problems have remained: paper money is still a relatively convenient way to make a payment as it is not heavy and semi-anonymous. Also, it has been realized when negative interest rates were introduced, simple $100 bill would effectively become and interest bearing interest. Introduction of negative interest rates would IMMEDIATELY cause massive cash hoarding by the people and the bank runs.
Those who try to ban cash should be upfront with their thinking. They should state what they think:
1. We, the government people, do not like cash because it allows anonymity.
2. Anonymity allows people not to pay taxes
3. Cash makes it harder to introduce negative interest rate.
The hard cold reality is that 95% real tax evasion, crimes and corruption, measured at the dollar value and volume is not conducted in cash, and is mostly conducted by by the top 1% by corrupt politicians and their private sector partners.
It is not about petty crime. It is about control of the common people
As to the Bin Laden reference. It has a more comic origin and does not confirm what he wants it to confirm:
"The €500 notes are popularly known in Spain as "Bin Ladens" because like the al-Qaida leader, everybody knows they are around but hardly anyone has seen them.
http://www.theguardian.com/money/2006/apr/20/spain.gilestremlett
It doesn't CONFIRM they are used for crime, its a joke on their scarcity.
A second hand car, 20 notes at 500 euros = 10,000 euros. I really don't want to accept some 'bank draft' or similar and the buyer doesn't want to prepay by bank transfer.
A holiday abroad, 5000 euros for 14 days, Cash is really essential. I think if I was traveling abroad, I probably wouldn't carry the money as $100 bills, you couldn't keep them in a money belt or similar, better to get the 200 euro or 500 euro notes. Euros are as convertible around the world as the US$ and easier to carry the amounts needed to ensure you have money abroad. ATMs are kinda hit and miss. Credit cards... nah, you can't really pay for everyday items in shops with foreign cards.
When the globalist elite scumbags of the world recently met at the World Economic Forum in Davos, one of the decisions was apparently to begin a "War on Cash". Mario Draghi soon proposed eradication of the 500 Euro note and Summers is proposing an end to the 100 FRN. Central banks around the world have either implemented(Japan) or are entertaining the idea of negative interest rates. As of now, this only applies to deposits at central banks, but how long before this insanity filters down to the retail banking sector? i.e. rather than getting tiny positive interest on your bank deposits, you must PAY the bank to hold your funds. In order to prevent mass withdrawals and people hiding their money in the mattress, the banking cartel needs to outlaw cash.
There is another more insidious reason for the War on Cash. When the bankers get into financial trouble, like in 2008 (and again in the very near future), they want deposits to be treated as just another liability that can be restructured in bankruptcy. It's called a bank "bail in" which forces depositors to take a "haircut" on deposits. It already happened in Portugal. Think it can't happen here? The Bank of England and FDIC published a paper in 2012 called "Resolving Globally Active, Systemically Important Financial Institutions". Under the proposed strategy, the losses of a bankrupt bank could be apportioned to "unsecured creditors"(depositors are the banks creditors). In exchange for your confiscated deposits, you would receive stock in a new holding company that has been "recapitalized" (with your money).
Canada has also put forth a deposit confiscation proposal in the "Jobs, Growth and Long Term Prosperity: Economic Action Plan 2013". The plan states (in part) that an insolvent financial institution(a TBTF one)
"...can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital."
The "certain bank liabilities" meaning the customers' deposits of course.
The "War on Cash" has very little to do with stopping illicit activity. The government and their masters in the banking cartel want control of all your liquid assets. That way they can skim a little more of your hard-earned wealth(negative interest) and confiscate what you have in the event of some TBTF bank getting in trouble. Also nice for them because they could record even more of your financial transactions and lock you out of the economy if you step out of line.
A ream (500 sheets) of 80gram copier paper will be about the same size as 3,000 notes. So €150,000 fits into that size and a box of 5 reams is the same size as €750,000. There are also €100, €200 and €500 notes so the value nearly scales up since the notes get larger as the value increases. Personally I doubt that "criminals" would have any trouble moving large amounts of cash around the world, even if currencies were limited to notes with a maximum value of about €50. In fact, the larger bulk and increased weight of smaller denominations would make it more difficult for one criminal to steal a significant amount from another. But a van full of cash would still be quite easy to transport and conceal.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
once again our wonderful elites think that fucking over all but the handful of bad actors is a *great* thing to do. Why? Because they can consolidate power. No cash means all transactions are traceable. What a gift to the IRS, FBI, divorce attorneys, hackers or anyone on a fishing expedition. You know what you need to replace the buying power of that $1,000 note cancelled in 1969? $6,530! Put another way, a "$1,000" note today is worth $148.69 of 1969 money. And they want to elimiate the $100? all $14 of it?
Here they are talking about 500 euro notes (worth $550 US) but the $500 US bill is already discontinued. Completely unrelated.
> in certain circles the 500 euro note is known as the "Bin Laden"
Certain circles? Where's the proof? This reads like propaganda. If you don't keep your money in a bank, you're a terrorist!
If the government stops doing their job of providing a reliable currency for physical exchange, then go back to trading gold nuggets and non-monetary coins containing actual specie....
Well, you must be a good example of this, as the person who wrote this article is not from the government.
What's the effin' use!? As if criminals will go out of business because they have to carry double the amount of paper! This is just shifting the problem to the next highest denomination, and you can keep using the argument till there is no cash left.
Low interest rates + economic downturn causes gold to go up. Why store money in bills that are now deflating.
At $1250/otz one million dollars of gold weighs 54 pounds. Not as light as $100s but better than $20s - especially if gold goes back up to its near $2000 high.
Besides, anyone who watches TV / movies knows it takes a fork lift to move the pallets of cash the criminals have while it can fit in their pocket when converted to diamonds.
Well. Isn't this just a good thing - sarc.
By removing currency, it forces everyone to use cards....
Trackable transactions. -> more government/business intrusion.
Hackable databases of card companies and banks. -> More individual losses....
No. Not a good thing.
The government does not need to know when I buy condoms, pills, jello shots, bullets or beans...
Cash is not hackable, except by force....
I might ( doubtful though ) see this as tolerable IF
1) banks, card companies, and government agencies were required to have the best security currently available.
( government and insurance company enforced... ).
2) A list of every company and government agency that has my data is available to me 24/7.
( This must include what data, any requests or warrants, purchases of data, bartering of data...).
3) Exclusion of children from the usual business of data for sale or government monitoring.
( If you have a child, their data is out there somewhere... gov or business - equally repulsive. ).
4) the pervasive use of the internet by financial institutions and government leads to the internet being classified as a utility, and treated as such.
( 20 years and 12 Billion dollars too late, IMO ).
Why not get rid of paper money denominated over $20, and introduce coins instead. After all, what difference does it make for most valid uses whether the material we make our physical money out of is paper or, say, stainless steel? And lets adopt a simple convention that $10,000 in coins denominated $50 or above weighs a kilogram. That makes the coins easy to count, and you can easily carry several thousands of dollars in cash on your person, but a million dollars in coins would weigh 100 kilos.
It'd still be possible to put your life savings under your mattress. Steel has a density of roughly 8000 kilos/m^3, so a million dollars of coins would still be quite compact. However paying for that $10 million dollar cocaine shipment would be extremely inconvenient to do in untraceable cash because it'd literally weigh a ton.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
It would be in our best interests to keep criminals using cash, rather than switching to the new virtual currencies. Kidnapping for ransom used to be a major problem in the US until improvements in police tactics eliminated all viable means of transferring cash ransom.
But recently we have seen a proliferation of ransomware attacks, because so far it has been the perfect crime. Bitcoin has proved to be untraceable. If we eliminate cash and push the thug community into making the technological leap to Bitcoin, we will see a wave of kidnappings eclipsing anything we have seen in Mexico.
You too can be perfectly safe! the State will have all power, and forbid all crime.
The more of some one produces, theoretically the manufacturing costs come down. So eliminating the $100 bill allows more efficiency for $50 bill production. Eliminate the $1 bill because a $1 coin is more cost effective and the Nickel and the Penny as they cost almost as much or more than they are worth, that allows Treasury and the Mints to focus resources on three coins and four bills. ;) With only three coins to juggle the mints can then resize the dime (okay maybe not the dime), quarter and dollar coins to more pocket friendly formats.
Meanwhile I want to go back to the weight topic. If $1 million in $20s is 110 pounds, then $1 million in $100s would weigh 22 pounds and $1 million in $50 would weight 44 pounds. At what point does weight and size become an issue for efficient criminal activity? The $50 denomination would allow $1 million in a backpack carried by a reasonably strong adult.
Canada is a great example of what will happen. Canada got rid of pinks ($1000 bills) because it would help eliminate organized crime. The result is that that (eliminating crime) never happened and the pinks are almost exclusively still used between gang members for their transactions anyways, they didn't go back to the bank to be shredded. When used legitimately they were pretty much a treat for big winners at casinos, anyways, and would end up going straight to a bank because almost nobody working at store thought they were real. Frankly, I wouldn't be surprised if half the cops didn't think they were real (like $2 bills in the USA). LOL!
Canada also had a massive counterfeiting problem 15 years ago or so, to the point it actually affected our GDP. The counterfeit bills were typically $20 bills (which is almost exclusively what you get from ATMs here). Stores, being that they weren't fed good info, felt that $100 and $50 bills were something to stop accepting. I would say the end result was a bit of inconvenience for the customer for mostly no value for the store.
The USA also has issues with $100 and $50 bills, or at least perceived issues with them. If you pay tolls with those (in NYS it is not all that difficult to rack up a toll over $20 in a passenger vehicle), the operator will write down your plate. So when I visit, I simply ask for $20 bills when I get money exchanged. The wad of cash is 5 times as thick but it doesn't really make much difference.
Having operated a store myself, I've shuttled $30k between places in mostly $20s (People get money from an ATM so that's what you end up with a lot of at a store). $30,000 in $20s is about the size of a 6 inch sub. That means reducing how much you'll get into a briefcase from $2.5 million to $500k. I don't think organized crime will actually care, and frankly, it will likely just push them towards alternative currencies (bitcoin, etc) making it even harder to track.
Getting rid of $100 bills won't make a hill of beans of difference in any way at all, except for increasing customer inconvenience (though even that is small as customers already find stores don't want to accept them) and very slightly decreasing how much money gets spent at stores. Crime will be totally unaffected.
There's so many more practical reasons to ditch the penny or the paper dollar bill.
And while *some* criminal transactions would be made more inconvenient by abolishing $100 bills, do you really think that black markets and criminal transactions would just end without it? The people behind them are incredibly entrepreneurial and have demonstrated a remarkable adaptability to pressures on their business, whether its engineering tunnels or building submarines.
I'd be curious just how they would end it -- there's got to be billions (trillions?) of dollars worth of $100s out in the wild, any program to eliminate them would take years and years of convertibility, and as long as they remained convertible, people would still use them.
I also wonder if there might also be some kind of second order risk -- the US $100 is widely used in places outside the US, would those use cases then switch to another currency that still has a larger bill and how would that affect the global preference for dollars, even if the underlying economics of the dollar make more sense.
...if we got rid of the $100 bill for sure. It's the preferred method for paying for car repairs. Shops are afraid of getting rubber checks (so often don't take them at all), and really don't want to take credit card because the middle-man percentage is too high. When you're paying for a few thousand in repairs, a wad of $100s is more manageable than a big wad of $20s...
It doesn't work.
I live in Venezuela. There are not high denomination bills here. You have to carry a bag of bills to buy anything.
Believe me. It doesn't stop anything.
Not that I am condoning the switch to electronic funds vs paper ones, but the one thing it would seriously put a dent into would be illegal immigration.
Since you can't pay them in cash, it's unlikely most would risk exposure by having a bank account complete with all the documents required to open one.
Well, that or the number of identity thefts would increase. :|
Rich people already move money around the globe by buying and selling precious stones. I know guys who take their wives on vacation while wearing $100,000 worth of jewelry. When they get to their destination, they sell the jewelry and leave the cash in that country.
Why wouldn't terrorists do the same thing?
We use $100 bills to buy cars off Craigslist. Yup, either at the title office, or a busy-ish Starbucks, or even at a police station.
Or when we buy a gun at a show, from a licensed dealer, after having passed an NICS background check, just like we're supposed to, obedient sheep we are.
Or we spotted a superb rolling tool chest at a yard sale, and a few $100s are easier than a fistful of $20s.
And we do so because some transactions do take place in cash because that's the preferred means of payment.
The use cases for the $100 bill are real and needful. Just stop it, you are not going to force the crooks to use their debit cards, k? Thanks, and go back to fixing the economy, like always, you're welcome.
deleting the extra space after periods so i can stay relevant, yeah.
I have said money should come in $1000 rolls of currency on soft paper. That way you know your money is at least worth a ....
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
We - the people - have given too much power to the state executives already, and their thirst for more is unquenchable!
As so often it will be us - the people - who get hit by these new rules, while the groups they are pretending to target will barely be affected.
Even if you believe in the integrity of your current government: history demonstrates that rules created with good intent and trust can AND WILL be abused.
Best not to relinquish any more power - it may be too late already.
"There are now so many ways to pay for things, . . . ."
"how many ways to pay for things are there?"
"There are so many ways to pay for things, I forgot how to be a journalist and started talking like a valley girl on instagram. After that landing a job at NYT was a cinch."
Before we start worrying about cash; why not actually crack down on all those 'respectable' financial institutions that are more than happy to launder money?
Sure, maybe filthy proles use stacks of grubby bills to do their crimes; but so long as HSBC and the like can launder billions in drug money and handle transactions for a variety of theoretically-embargoed states(and face zero criminal penalties either as a company or on the part of any of the people involved); only little people smuggle cash.
Without a flamethrower-cleanup of the financial sector, making noises about high-value notes is basically just bigger criminals whining about the fact that they have to deal with lesser criminals who might find using money mules cheaper than buying bespoke financial services for the multijurisdictional client who values discretion.
There are times when you NEED to buy something from someone and ONLY CASH will do.
I used to travel more often. When the car dies, you may need to buy a wheel or battery from a local, non store.
You may also have a friend in need. Helping them is cash, not my credit card.
If you get rid of $100 you will see demand for gold and silver go up.
You will also see more theft of Tide (a popular barter item).
The criminal world will go to a barter system much more easily than the legal world.
Headline and body both introduce "Summers", then body starts randomly attributing quotes to someone named "Sanders".
I thought Slashdot was supposed to be getting better?
So, we are to believe that crime will be significantly reduced because criminals will need to carry 5 bags instead of one? Criminals are lazy, but if you put $100,000 worth of $20s in a duffel bag they will still find the energy to carry it.
This is more about tracking transactions for law abiding citizens, or increasing the frequency of electronic transactions where businesses can charge a fee for each transaction.
first they want us to eat bugs, now they want to take away the rest of our money. at this point, the rich are basically shooting peasants for sport.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
I was under the impression that criminals always insisted on small, unmarked bills. Oh wait this is politicians crying "let's solve problem A" by pushing agenda B.
It's time to kill Larry Summers
Who wants to earn a living anymore? Our government clearly says you have no right anymore.
The totalitarian regimes would starve their people. Here is more of the same.
out those pennies... I mean why not - they only cost 50% more than what they're worth to produce. -logic.
Its worth about 6 or 7 hundreds.
What's a criminal to do? Crime provides an income for a large segment of Americans. Can America actually afford to support the many millions who get by on the criminal lifestyle? Criminals should be considered a separate race of people born with brains not socialized in the same way that most other types of humans possess. We want farmers, waitresses, iron workers and everyone else to succeed. Why the great prejudice against criminals. In Japan an elderly, traditional woman was complemented on her fine home. She smiled and replied, "Oh yes, my son is a wonderful criminal.". The notion that being a criminal is a bad thing does not permeate every culture in this world.
Going political here but my first impression is some want to squelch philosophy of two Founding Fathers, Ben Franklin and Alexander Hamilton. These guys are not ex-presidents like everyone else on printed on currency but they were quite instrumental in creating aspects of Constitution and other United States government workings. Unfortunately much of that has been undone in recent past years (you all know what Ben said of security) and along with others who want to replace Alex on the $10 bill with someone else (these people really need to read history before replacing with their current political hero).
mfwright@batnet.com
Yeah, let's ban all cash, drive interest rates negative (except for top tier savings accounts with balances greater than $100k or so), force everyone to either invest in the stock market or continually buy stuff in order to try to maintain the value of their earnings. Real estate prices will skyrocket because that will be one of the places people will want to stash their earnings.
The top 1% will become the top 0.1%, the bottom 99.9% will be reduced to a half-assed barter economy, no personal savings, and mortgage and loan debt beyond belief.
Left MS Windows for Linux Mint and never looked back!
Vote for Bernie in 2016!
FTFY...
"The NYT has an interesting editorial on why getting rid of big bills will make it easier for the government to track every transaction every citizen makes..."
I don't think there is any conspiracy going on. It is just that the central banks cannot do anything other than manipulate interest rates to attempt to stimulate the economy. So if there is another crash with interest rates already at zero, what do they do? Perhaps they will sit by and let the whole thing collapse, hoping that the bottom is reached before people turn up in the streets with pitchforks. However, ask yourself this - who is most likely to want to turn the system on its head: a bunch of people with zero asset, and now no job, house, hopes, or ability to feed their families? Or a bunch of middle class savers who are pissed off that their savings are being raided by the central bank? The reality is that savers have skin in the game, so will complain bitterly but get on with it. Those who have nothing might just decide the game needs changing by any means necessary if nothing is done for them.
Personally I don't think there are any simple ways out of our present mess. A lot of stuff has been proposed: UBI, people's QE, central bank infrastructure funding. However all of them have potential problems either from a practical point of view, or politically. In the end it may be that just continuing to beat the economy with interest rates is all that central banks can do until we can see how things like UBI experiments and the AI jobs armageddon work out. I mean, the reality is that if you were paying 10% on cash trapped in your account, you would more than likely just go out each week and spend all your money, even if you don't really want anything you are buying. The stimulatory effects of this occurring in aggregate should not be underestimated. Of course the massive asset bubble and the destruction of the planet from rampant zombie consumerism will likely catch up with us eventually, but I guess Yellen and Carney figure they will be long retired by then.
says Anonymous Troll
Not to mention 100$ is pocket change- it's worth about 25% of what it did when they eliminated the higher denominations ~50 years ago.
love is just extroverted narcissism
I just can't accept the premise underlying this proposal, and so many others, that it is appropriate to punish innocent people (by taking away their choices, or their property, or anything else) because of what someone else *might* do.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
This is the first step to making all economic transactions digital and trackable. Instead of money, you have a card, or a phone. Better hope you don't piss off some bureaucrat who can literally have your money turned off.
This isn't about anything but control. No better way of quelling a rebellion than controlling or canceling money. People with independent funds can be so.... uppity. So... rebellious against their betters.
Mr. Sanders is nothing. A mouthpiece. A tool and a fool. But he signals the intentions of the government.
Please do not read this sig. Thank you.
Although he claims to be an economist, his economic policies associated with Obama were overtly malicious. They reduced the employment participation rate, reduced the velocity of money, substantially increased welfare payments, increased the tax RATES on income, dividends, capital, and employment. You tax something more you get less of it. This guy is a hack.
Bring back the $1000 bill. I used them to buy my first car, and with all the inflation (currency devaluation) caused by this administration, money buys so much less now than when they took office, it made every poor person poorer by about 15%. Dwell on that for a moment. This President instituted policies that were not in place before that FORCED income inequality.
"A crisis is a terrible thing to waste" and a wonderful thing to create.
The TARP program worked. The "Stimulus" had no to negative results.
http://www.v-serv.com/solutions/
Direct transfer, of course. You transfer the money, and he or she sees it in his or her account within a minute, and it's instantly usable.
About 8% of adults in the US do not have and/or cannot get bank accounts. Banks will not give everyone who asks for one an account and some people cannot afford even the modest fees that come with a low end bank account. Unless you want the government getting into the banking business this isn't going to change any time soon either.
Posting anon for obvious reasons - I use cash pretty extensively and get my paycheck in cash from the bank. I put some in a debit card to use over the course of the month, and of course savings, but day to day purchases are done with cash. I would rather see us talking about adding a $500 bill back in instead of removing the $100 bill. Inflation has rendered the $100 bill equal to a $500 bill just 100 years ago anyway.
I use cash so I can remain somewhat anonymous. Being in IT I have a pretty good idea of how much data is flowing out there and I want to opt out as much as possible. I believe that's my right, but it looks like the control freaks think otherwise.
If you remove the 500 Euro note, criminals won't switch to 100 Euro notes, they'll switch to the next convenient exchange medium. Whether that be another currency, diamonds, or some other precious commodity, or something else (bonds, deeds, etc).
Removing the 500 Euro note therefore will do exactly nothing to criminals and just make life more difficult for non-criminals.
This is beyond silly.
What exactly is a negative interest rate?
Exactly what you might guess. It means the party doing the lending is paying the borrower to take the loan instead of the more normal charging the borrower. There are all sorts of knock on effects of this, most of which are bad for the same reasons deflation is generally bad.
Are there banks that *seriously* expect the customer to pay them money to keep their money for them....?
Actually it's really the Fed lending to the banks more than the banks lending to us. You aren't likely to see a negative interest loan on a house but you might see the federal funds rate go negative.
Every government, since the dawn of civilization, has craved power.
Too much is never enough. The nature of government -- all government -- is to attempt to increase control at the expense of Liberty. It's what governments do. And it's why the framers of the US Constitution said that the ONLY legal tender would be gold and silver coin. They wrote that because they *knew* that money was one of the most important mechanisms of control -- and tyranny.
Government already pulled a fast one on the American people by gold standard. But even that massive sleight of hand is not enough for the ravenous, power hungry beast at government is: They want even more power.
They want to control every transaction, every penny, every measure of your wealth. This is indeed a war. But it isn't just a "war on cash" as many in the blogosphere call it. It's a war for complete and absolute control over your life. It's the very thing the framers of the Constitution feared most: Tyrrany.
The thing is, we are the boiling frog. We don't notice how hot the water has become. We think it's normal to have fiat currency. We think it's normal to have undeclared wars. We think it's normal to have unplayable debt.
We are so far down the road to serfdom that we won't notice the water getting a few degrees warmer, as the techno-pundits herald the wonderful new simplicity of our all-digital currency.
Yeah... I must be a wingbat, old-timer. I just don't get how awesome this new cashless future is.
All I can say is, resist this. If you don't your grandchildren will be slaves.
I know, I know... It sounds so fringe.
It's about time we did this. Fucking criminals, all the time trying to conduct trade of any kind without the government being intimately involved.
We should also implant GPS trackers in all the coins, and make all the eyes in all the portraits on all the denominations functional. Of course, we'll have to make room for all these new security features, so some older features are going to have to go. I suggest we start by removing all references to "liberty". Only the filthy terrorists will miss it, anyway.
There isn't any point is even pursuing cash. Whenever you make a change to counteract criminal operations or behaviors, they just come up with another one within "moments". If there were a way to make criminal activity too difficult to engage in, and work around the law, the world would have pretty much be freed of criminal activity long before now.
The general rule with weighted averages is:
1. Piss people off and reduce negative [insert effect or item here]
2. Make people happy and have very strong negatives that result from it
3. Make some people happy and some people pissed, and have more deterrents as well as increased superior work-arounds for the bad.
4. BS people into thinking all is well when actually doing something secretive to limit the "bad people" that will eventually be discovered by all.
Next phase after above outcomes:
1a. Reduced negatives induce increased negatives (Human nature - boredom with experimentation or "posturing"). GOTO 1.
2a. Strong negatives make people unhappy and wanting strong positives put in place to balance it out, resulting in too much positive as an end result. GOTO 2 and drift to 3 after many failed attempts.
3a. The superior work-arounds are more widely used and the "good people" try to strongly oppose it, which results in more "noise" from the middle (people only slightly perturbed by it due to feeling of loss of control) and higher imposition on the "good people" as a side-effect of limiting negatives. GOTO 3. Drift to 4 after many failed attempts.
4b. "Good people" will be pissed that they weren't the ones to make the decision and feel inferior, "bad people" will hear about the other "bad people" being caught and find a work-around. GOTO 3a AND OR 4a UNTIL (I know it's not proper BASIC, but extrapolate, smart ones).
3, 4 and 3a, 4a are more of a downward spiral, as we are living today. People think there's a solution and they already figured it our and refuse to "admit defeat" and come up with something completely and totally different; more posturing, Human nature, and inability to admit one is wrong (for any reason; see psychological embarrassment and inferiority complex).
What's necessary is more admission of lack of knowledge, and learning from mistakes. Dynamic adjustment of solutions, with success and further learning or admission of mistakes in the fix with more resultant fixes, is a must. Be more public about it (knowledge and practices) because the more those with superiority complexes know about it, the more they will openly show their attempts to defeat it, which leads to more available learning from others failures. The "stupid, ignorant, or those living in a state of disconnection from reality or that just plain don't make any sense" will do whatever they want with the information. Don't ignore them, but find common patterns that are "lemming-like" in following and decrease said patterns' solutions in weight. Increase the weight of the ones that seem to make no sense. If it doesn't make sense, it's new. Give it weight. Learn from failure or success and adjust weights accordingly.
I'm not "superior", but it's funny; this post will get modded down by those with superiority complexes because it makes them think for a second that they don't know everything. I don't know everything. Everything is a work in progress except for Universal constants, and hell, we can't even say they are constant if you think long-term.
END (sorry, had to)
Have gnu, will travel.
Dinner for four (with a tip) can easily approach $100. Shopping for the week can easily be $100. There is an order of magnitude difference between $100 and 500 Euros (OK, half an order, it's 5.5x instead of 10x). I have to assume that part of this is shilling for the banks, who would love to impose their 3% tax on every single dollar, every single time it changes hands. Hey, Mr. Summers, instead of removing convenience from the great mass of people, how about explaining why banks get to charge such a high percentage for, essentially, an email? (And then you can explain why phone companies get to charge ridiculous rates for data when it's in the form of text messages . . . but that's another story of the large entity being able to force its will on each of the small entities, even though the small entities could easily overwhelm the large one if they would only work together.)
...seriously. You cant stop people from trading things.
The sole reason why they like automatic payment so much is the cost of handling cash.
Nope. Handling cash doesn't cost 3%. Accepting credit cards does. The credit card companies want this to happen, because then they get 3% of the entire economy.
I don't respond to AC's.
The man is described as always being the smartest guy in the room yet nearly every major position he's taken on the economy has been wrong, like 180 degrees wrong. The most recent and damaging was his staunch support and very active role in the deregulation of financial derivatives.
Time to dust it off.
https://en.wikipedia.org/wiki/...
Prove anything by multiplying Huge Number times Tiny Number
Bottle Caps!
this++. The original title missed the point: It's not a stupid example. It's a deliberately misleading example, with a deliberate appeal to emotion that is totally unrelated, and as unrefutable as it is unprovable.
If the issue was about moving large amounts of value across international borders, I think the big time criminals would pick a far better resource than US currency. It would be much simpler to use a precious metal or some such thing to move the value than piles of cash. The Mexican cartels already do this by purchasing guns in the US at cheap value, and smuggling those back across the border in essence doubling their profit by making money on both directions of the trip. Seems like I could melt gold into something that is pretty easy to conceal just plain walking across a border, like a cell phone.
Same goes for all of those paranoid about the government taking your money electronically. If you want to keep your savings out of the government hands, government issued script is not going to do it. You are one bill change away from having to change it all out again. Gold, or something else like that, sure seems a lot harder for them to get their fingers around.
That said, you are talking to someone who is not worries about that and has no gold to speak of. I don't believe the government would be able to pull any of that off as there would be mass revolt. If the apocalypse comes, I think booze, food, and ammo are going to be far more valuable than any precious metal. My plan is to not survive the apocalypse as I don't really want to live through that. It wouldn't be pretty.
Here in Canada we ditched $1000 bills some years ago. They were a neat colour, rose pink. I only ever saw a couple. Never handled one. We also turned $1 and $2 bills in to coins, and killed the penny entirely. But that's another story.
The biggest cash purchases I've ever made have been in the $1000 to $2000 range, and I paid in $100 bills.
...laura
... harder for criminals to do business ...
Getting rid of large notes will make it harder to do business, period.
who actually reads that stuff anymore? it has been proved over and over the years that they are the mouth of most of the three letter agencies since late forties, anyone getting information from those spin doctor needs to have they head examined but then most are sheep's and there is not help for those...
As far as I'm concerned the true motive is to force larger transactions to use electronic transfers, allowing the government to track more transactions.
This is purely a push for more tracking. The government wants ALL your transactions to be electronic so that you cannot ever have a private monetary transaction.
And... the reason they want to track every transaction is so they can TAX every transaction in seamlessly new and inventive ways.
After banning large denominations of paper money, the ownership of cut gemstones, pearls, old masters paintings and noble metals will also be criminalized, because those can be used to transfer a lot of value in small physical packages.
You never hear about $100 bills wanting to kill Larry Summers.
Why can't we all just get along.
The Hundred Dollar Bill is used all over the world.. Keeping it around is a huge boon for America.
I can trade American currency for service in most parts of the world.
A good usable currency that works across the globe is good for trade, which in turn is good for peace.
While easy to use money is a good thing for smugglers and terrorists,
I suspect that making currency harder to deal with will help them grow far more.
Limiting the currency is probably a bad thing.
...that the New York Times publishes an editorial in support of the government wanting to do something to increase control over the population,
Next time I go to buy a used car, I'll have a big suitcase of money with me. And sunglasses.
they will just switch to something better anyway, diamonds and gold. not dependent on a govet. messing with its currency value. and diamonds are light. gold ok the weight is an issue. but there are other rarer metals to use.
Apparently, Summers doesn't understand how inflation works.
$500 of 1969 dollars would be worth: $3,267.97 in 2015
$500 of 2015 dollars would be worth $76.50 in 1969
$100 of 1969 dollars would be worth: $653.59 in 2015
$100 of 2015 dollars would be worth $15.30 in 1969
Source: Inflation Calculator.
The Federal Reserve has been working hard for the last 100 years to reduce the value of U.S. currency. It is not necessary for Congress and the Department of Treasury to aid them any further in the endeavor as they seem to be getting along just fine.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
How is 50cent going to purger himself if he can't post pictures of stacks of 100 dollar bills online.
lose != loose
This won't do anything as long as the Feds don't throw bankers who launder billions for drug lords in prison. Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court.
" getting rid of big bills will make it harder for criminals to do business"
No, it will either make them stronger by training them to lift the double number of 50 dollar bills or they'll just walk twice to the car with the money.
An interesting case study is the one of South Korea, which until 2009, the largest bill was the 10K Won note (~$8 USD). Banks would actually issue banker checks in denominations of 100K Won in order to fill the need. That said, in 2009, South Korea began to issue a 50K Won note (~$40 USD). What's interesting is that the collection rates of the notes has dropped down to about 27%, much lower than the 80-90% collection rate on other denominations. However, most Koreans believe that the large bills are being "pulled" out of circulation by the "underground economy" - basically under-the-table cash transactions which can be innocent (people hoarding cash) to gray (small businesses underreporting cash earnings for tax evasion), and black (corruption and criminal slush funds). It's a huge issue in Korea, where the underground economy is estimated between 17-25% of GDP... basically, a large chunk of the economy untaxed and regulated. The collection rate had peaked around 61.7% but dropped when the government began to more aggressively pursue tax dodgers. Short news article here andhere. Information on the underground economy here.
The man is described as always being the smartest guy in the room yet nearly every major position he's taken on the economy has been wrong, like 180 degrees wrong.
I'd hate to meet the other people in that room.
Summers is wrong here, but it is for the same reason he thinks he is right:
Technology is also "obviating" the need for criminals to move large amounts of money in cash at all, and making easier to track them when they do use large sums of cash.
Criminals dealing in $10,000+ cash regularly already have access to several electronic means of transfer and 'laundering' as an alternative.
Technology goes both ways...criminals wouldn't be hampered by removing large denominations because they already have so many electronic options.
Thank you Dave Raggett
Interest is the future value of money.
So what these economic "geniuses" are saying, that despite billions in stimulus, and a "fantastic recovery and job market", that money has less or no future value.
They want you to spend it NOW, but it will have the opposite effect. As rates go down more, people facing retirement or other future costs will be forced to save MORE, not spend more.
The look on unanticipating recipients is priceless, as the biggest note they ever get to see is something between $1 and $10 :-)))))))))
There is a big difference between a $100 and a EU500 bill-- roughly a factor of four. $80-200 transactions in the US are fairly common, and it is not especially uncommon to have a nearly $100 transaction that must be made in cash. A banded stack of $100's is only $10,000. While 5-6 might make up the median income, it really isn't that much money.
I remember traveling with dreadlocks and the like, living on $15/day. I still had 4-5 $100 bills hidden away for when things went wrong. Doing it with $20's would be a total pain.
Oh well... A single 1-oz gold coin is fairly readily exchangeable for $1,200, making $1MM only weigh about 50 lbs.
Of course we are talking about money from drugs. How about legalize and then all that cash is no longer illegal. Freedom and even more freedom, plus less crime. Sounds too good to be true.
1. A US $20 and $100 cost about the same price to make So it will cost the government 5 times as much.
2. Criminals a going digital with currency.
Bernie Sanders need to hammer this every time he speaks publicly.
I can't think of a sharper delineation between him and Hillary 'Wall Street Gal Pal' Clinton.
This Rothschild Jew mouthpiece definitely doesn't want YOU to have $100.00 bills.
In fact this Jew leech never worked an honest hard day in his life, and was silver spoon fed from birth. Jews like him want to suck the lifeblood out of the average human being, pushing them into slavery
When traveling internationally, you often get better exchange rates at your foreign destination. Physical cash exchanged for physical cash is the easiest, and sometimes has to be done in ~$1000 amounts
I like having physical cash at home. There is always a possibility of losing access to my bank accounts for a while - identity theft, etc. Having enough cash to live on for a couple of months seems like a good way to protect against the short term fallout.
There are a number of purchases that I make that I do not wish to be tracked, Nothing illegal, but things I don't want tracked by advertisers.
I've had credit cards canceled because someone stole the number. If this happens while I am on travel it could get ugly if I didn't have enough cash to cover my expenses.
I understand that the government wants absolutely surveilance of everything, but I don't wan tot give it to them.
All human interaction must go through proper channels. No more direct communications allowed.
“He’s not deformed, he’s just drunk!”
So Larry Summers thinks we need less freedom and more control. All that does is say something about himself, not the rest of us.
Eliminating large bills just pushes people to cryptocurrency faster.
and bail-ins.
Swiss newspaper NZZ had this article, recently:
http://www.nzz.ch/wirtschaft/w...
It's about the cost of taking all of your money out of the bank and store it somewhere else, in cash.
The Swiss Franc, due to its relatively high valuation and large denomination, is apparently even cheaper as a "storage-vehicle" than gold.
Above cost comes into play, when the bank starts to charge negative interest rates for your money.
Instead of paying the bank 2% interest, you could pay somebody else 1% to guard your stack of paper-bills.
Windows 2000 - from the guys who brought us edlin
Criminals use them to get around more easily, so we should definitely do away with them.
"The U.S. hundred is the international currency of bad shit..." --William Gibson, Spook Country
The 500 Euro note was called the Bin Laden not because terrorists use it. It was called that because everyone knew what it looked like, but nobody had ever seen it - just like Bin Laden when he was in hiding.
The use of cash involves several social costs to individuals --- especially the poor --- as well as business and the government.
For individuals, cash usage imposes a regressive tax with the highest impact on the unbanked.
By FDIC estimates, 8.2% of U.S. households are unbanked and 20.1% of U.S. households are underbanked. The unbanked pay four times more in fees to access their money than those with bank accounts, and they pay $4 higher fees per month for cash access on average than those with formal financial services. Examples of such fees are those charged for payday lending, buy-here-pay-here auto loans, and check cashing. The unbanked have a five times higher risk of paying cash access fees on payroll and EBT cards.
Poorer consumers have to spend far more time getting cash. On average, Americans spend twenty-eight minutes a month travelling to get cash, but that time isn't evenly distributed. People who don't use a bank spend about five minutes longer getting to the place where they can get cash, and unemployed people spent nearly nine minutes more.
For businesses, paper money has to be managed: it must be stored, guarded, and accounted for. It can be difficult to transport and is inherently insecure.
U.S. retail businesses lose about $40 billion annually because of the theft of cash alone. This cost is also disproportionately borne by mom-and-pops, many of which operate in poor neighborhoods and rural areas. These cash-dependent small businesses cannot afford sophisticated security and cash transportation services.
For the government, the annual value of under-reported taxes in the United States is $400 billion to $600 billion. According to the national taxpayer advocate's estimates, 52% of this gap is because of under-reporting by self-employed taxpayers. If even half of this under-reporting is directly enabled by a cash economy, the U.S. Treasury loses at least $100 billion annually because of cash.
The implications for a shortfall in tax revenues are quite direct in terms of their impact on the poor (even after accounting for the fact that many of those who under-report are themselves poor).
About 12% of the federal budget in 2012 supported programs that provide aid (other than health insurance or Social Security benefits) to poor families. Such government safety net programs kept some 25 million people out of poverty in 2010. The existence of the tax gap puts pressure on the government to cut back on safety net programs, because they are the ones that are among the first to get cut.
The Hidden Costs of Cash [Harvard Business Review, June 26, 2014]
It's not commonly seen, but Canada has a $C 1000.00 denomination bill. I'll save everyone the joke, it's still worth about $US 700.00 so easily qualifies as a "big bill". Why is there no outcry about it's existance, about how a lunch pail of 'em adds up to a million, blah, blah, blah? Because every time you obtain one (or any number) of them, the bank records the serial numbers. And every time you deposit one, or convert it to other denominations, the bank records the serial number again. So, criminals, go ahead and make yourself about a thousand times easier to be identified and arrested.
WHY do idiots always come up with a regulation with No Earthly Use when a pencil solves ALL of their objections to this or that?
Because Idiots.
Evil takes many forms, and Larry Summer's rationalizing punishing millions for the crimes of a few is one of those forms of evil.
Evil is a government that is so lazy that it comes up with ideas like this to try to control crime. Evil lazy government: That's your current thinking Larry Summers. Don't be lazy - find criminals by doing the proper hard work to get them, not by screwing over the masses. Way to go criminalizing significant commerce between free individuals, Larry. Wayyy toooo go.
A country that keeps mis-fixing problems in this manner ends up like all the other countries that behaves as stupidly.
Larry summers, go move to Venezuela or Cuba ASAP; they're your kind of culture over there. Sorry the DDR and USSR aren't available anymore for you.
Are you kidding me??? $100... a "big bill". What planet are they living on? You can't even buy a decent amount of groceries for $100. The $100 bill is probably worth HALF of what it was when they discontinued the $500 bill in 1969.
Please keep your hands off my cash. It is one of the last remaining ways to keep corporations and government from totally controlling us.
Zcash is an implementation of the "zerocash" protocol. Based on Bitcoin's code, it intends to offer a far higher standard of privacy and anonymity through a sophisticiated zero-knowledge proving scheme which preserves confidentiality of transaction metadata.
What really annoys me is that your only option for payment in a lot of cases is a credit card. I'm not impoverished and I do things you'd expect a well off person to do. I fly places for business, I rent hotels, I possess a mortgage or two. I need to identify myself for many things that I really shouldn't need to if not for piss poor security mechanisms. I understand the need from a business perspective as a business owner, but still I shouldn't have to do these things and it's a shitty system that results from the lack of adaptation of poor systems we've grown to rely on (credit cards).
I should be able to put down a cash deposit for a hotel or get a plane ticket without identifying myself. Security is a poor excuse to invade my privacy or track me. How many hotels though will take a cash deposit though? Not many I suspect and they all require a credit card to reserve a room. Then we get to mortgages and the likes. I'm going through that right now. They want to know everything about me including my "motivation for moving to New Hampshire". Scary considering my motivation for New Hampshire is to take over the world (jokingly- but it is politically motivated- see www.freestateproject.org). They even want stuff that I can't really get until *after* the mortgage is approved. They introduce chicken and egg problems: I need to move to New Hampshire before I can prove I'm allowed to do business in New Hampshire. Not that it makes much sense given I don't need permission to do business in New Hampshire in the first place.
I get so tired, every time this topic comes up, of seeing all the comments of "what's the problem? No one uses cash anymore!"
Maybe you don't. Maybe your friends don't. You're probably middle-to-upper class, living in an urban area, working 9-5 jobs. But not everyone is like you. Many people in this country do not have bank accounts or credit cards. Many people in this country do not get regular paychecks. Many people conduct business outside banking hours. Many people live dozens or hundreds of miles from the nearest bank!
There are still a hell of a lot of situations where cash is the most practical way to conduct transactions, even large transactions, and eliminating large bills does nothing but add hassle and decrease security.
and keeps all their eggs in one basket. They can confiscate all the account with the push button.
To confiscate physical items, you cannot stop time and search and seize immediately.
With the cash you can announce bank holiday and just reduce the money. If you think that is a right wing nonsense, that is exactly what happened in Cyprus. Cyprus had much better debt ratios than USA.
This is called bail in. Google if you haven't heard it.
Cash is what the small people have to say "I am taking my money out of this bank" if the bank wants to charge you more than what you are willing to pay.
Big guys/ businesses do not run into these problems, banks just chase them to loan to them, with ridiculous interests, and great benefits if money is in the bank.
But, as 99.999% of bank customers are "too expensive to maintain", screew the small ones, and if banks can find a good excuse to force them to stay and screww them more, why not. Therefore ban big amount bill. It starts with the $100.
They just don't care anymore do they? Full steam ahead to total control.
"a stack of 500-euro notes worth $1 million weighs just five pounds and can be carried in a small bag"
Someone needs to get their units and measures sorted. To use 'stack', Euros, Dollars, Pounds (weight) and 'small' all in the same breath is hardly helpful!
"If you think the problem is bad now, just wait until we've solved it." --- Arthur Kasspe
This is just yet another freedom lost. The freedom to conduct our business in private and off the grid outside the prying eyes of the police state. We no longer live in a free country and this is proof positive...
I think Larry Summers is completely off base here. I believe we should bring back the $500 and $1000 bill, and retire the $1 bill in place of the $1 coin. I'm also in favor of retiring the penny. Over time with inflation the denomination needs to move up or become worthless, or at least inconvenient to those of us that actually have need for larger denominations.
"There are now so many ways to pay for things, and eliminating big bills should create few problems." What a crock. All the other ways are monitored registered tabulated calculated and ON THE RECORD. Want to pay the babysitter? better get her interac #no. Save for a rainy day where nobody excepy your needy children can receive it? Tell them they better declare it! Wanna buy a bike cash at a swap shop? Forget it. Big friggin brother is truly at the door....
Back in 1969 the gov't suspended circulation of all bills greater than $100... If we want to revisit that decision, the likely conclusion would be to bring back the $500 bill, not claw back the $100 bill. A hundred 1969 dollars is over six hundred dollars today - that makes today's $100 bill the equivalent of a $20 bill in $1969 (based on buying power). This is about the government being able to track ever more transactions, not about 'fighting terrorisim'.
They really should bring back the $500, $1,000 and $10,000 bills. In 1969 when they eliminated them, the $1,000 had about as much value as the $100 bill does today. Actually, I'd argue today we're closer to $10,000 to $100. What about our "hope and change"?
Why not do away with the $50, $20 and $10 while at it? Another option is to devalue the $ so that 1,000,000 or 2,000,000 US$ = 5 Euros - that would make things equally onerous.
People that travel internationally and need to be able to have US$ to change legally on local markets in developing countries have a legitimate use for $100 bills. As I recall, the last time I sold a car in the US, I was paid with 40 $100 bills. When I go to sell my motorcycle this coming spring - I don't want a wire transfer, I don't want a cashiers check, I don't want a money order. A stack of $100s would suit me nicely, thank you.
Dumb ideas from out of touch bureaucrats are a dime a dozen.
Could just start using pesos or rupees. Then it doesn't matter how large the denomination, it's still worthless.
We had an ice storm several years ago and the power went out. Those gasoline stations with a generator for powering the pumps didn't power their payment systems so you had to pay in cash if you wanted gasoline. My credit cards have been hacked a few times in the past ten years and it's a headache when you can't use them (I only carry two of them as it's easier to keep track of). It's a pain to make trips to the bank when you need cash and you can't use plastic or paper checks. I rarely use $100 bills - usually only for trips where I want some cash in case of problems with payment systems or at places which don't take plastic. Lately the bank has been giving me $50s for large amounts though I usually don't specify the denominations. Of course an easy way to move larger amounts of cash is 1-ounce gold coins. They're worth about $1,200 right now and they are compact and easy to buy and sell. You might have problems with a metal detector at an airport carrying a bunch though. I guess the ultimate way to eliminate crime would be to force everyone to use pennies.
Criminalizing innocuous behavior like owning "too much" cash means there are confiscatory tax rates and/or some other stupid-ass laws in place. Laws they can't effectively enforce, so they feel they have to invent crimes like "money laundering", because they can't seem to get convictions for violating the actual laws.
Watching restrictions on the use or possession or transfer of cash is the public policy equivalent of watching the canary in the coal mine.
There's one seriously dysfunctional government out there, folks.
There's no time like the present. Well, the past used to be.